SCHEDULE 14A
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (As Amended)
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] CONFIDENTIAL, FOR USE
OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14A-11(c) or (S)
Section 240.14a-12.
CANTERBURY INFORMATION TECHNOLOGY, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement,
if other than the Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the previous filing by
registration statement number, or the Form or Schedule and the
date of its filing.
(1) Amount Previously Paid:______________________________________
(2) Form, Schedule or Registration Statement No._________________
(3) Filing Party:________________________________________________
(4) Date Filed:__________________________________________________
Canterbury Information Technology, Inc.
1600 Medford Plaza, Route 70 and Hartford Road
Medford, New Jersey 08055
P R O X Y S T A T E M E N T
Proxies, in the form enclosed with this Proxy Statement, are
solicited by the Board of Directors of Canterbury Information
Technology, Inc. for the Annual Meeting of Stockholders to be held
on September 9, 1998 at 10:00 a.m. at The Mansion on Main Street,
Plaza 3000 at Main Street, Voorhees, New Jersey.
Shareholders of record as of the close of business on July 17,
1998 will be entitled to vote at the meeting and any adjournment
thereof. As of that date, 6,146,242 shares of common stock of the
Corporation were outstanding and entitled to one vote each.
Execution of a proxy will not in any way affect a shareholder's
right to attend the meeting and vote in person. Any shareholder
submitting a proxy has the right to revoke it at any time before it
is exercised.
Any proxies that are sent in by shareholders may be revoked
prior to September 9, 1998 at 10:00 a.m. by mail or other
deliveries in writing, or by voice vote if the shareholder attends
the Annual Meeting.
The persons named as attorneys in the proxies are either
Officers or Directors of the Corporation. With respect to the
election of a Board of Directors, shares represented by proxies in
the enclosed form, which are received, will be voted as stated
below under "Election of Directors." Where a choice has been
specified on the proxy with respect to the proposal, the shares
represented by the proxy will be voted in accordance with the
specification and will be votes FOR that proposal if no
specification is indicated.
Under Pennsylvania law, the presence of shareholders entitled
to cast at least a majority of the votes that all shareholders are
entitled to cast on a particular matter to be acted upon at a
meeting, shall constitute a quorum for purposes of consideration
and action on a matter. Only shareholders indicating an
affirmative or negative decision on a matter are treated as voting,
so that abstentions, broker non-votes or mere absence or failure to
vote is not equivalent to a negative decision and will not count
toward a quorum, and if a quorum is otherwise present, effect the
outcome of a vote. A broker non-vote occurs when a broker submits
a proxy but does not have authority to vote a customer's shares on
one or more matters. The affirmative vote of the holders of a
majority of shares of common stock entitled to vote at the annual
meeting is required for approval of each of the actions proposed to
be taken at the Annual Meeting. In the event a shareholders'
meeting is called for the election of Directors and is adjourned
for lack of a quorum and another shareholders' meeting is called,
those shareholders entitled to vote who attend the adjourned
meeting, although less than a quorum as fixed under Pennsylvania
law or in the by-laws, shall nevertheless constitute a quorum for
the purpose of electing Directors. If a meeting called to vote
upon an other matter than the election of Directors has been
adjourned for at least 15 days because of the absence of a quorum,
those shareholders entitled to vote who attend such meeting,
although less than a quorum as fixed under Pennsylvania law or in
the by-laws shall nevertheless constitute a quorum for purpose of
acting upon any matter set forth in the notice of meeting, if the
notice actually states that those shareholders who attend the
adjourned meeting shall nevertheless constitute a quorum for the
purpose upon acting on the matter, then the vote would be binding.
No other matters are expected to be presented to the meeting.
If any other matter should be presented at the meeting upon which
it is proper to take a vote, shares represented by all proxies
received will be voted with respect thereto in accordance with the
judgment of the persons named as proxies.
An Annual Report containing summary financial statements is
enclosed with, but not as a part of, this Proxy Statement. Form
10-K report for the fiscal year ended November 30, 1997 as filed
with the SEC, including complete financial statements audited by
Ernst & Young, LLP, as well as the Company's Form 10-Q report for
the period ended May 31, 1998 are available upon request.
The first date that this Proxy Statement and Proxy Material
were sent to the shareholders was July 28, 1998.
Proposal No. 1 - ELECTION OF DIRECTORS
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Seven Directors are to be elected at the Meeting, each to
serve until the next Annual Meeting and until his or her successor
shall have been elected and qualified. Each of the nominees named
in the following pages is presently a member of the Board of
Directors. In case any of the nominees should become unavailable
for election, for any reason not presently known or contemplated,
the persons named on the proxy card will have discretionary
authority to vote pursuant to the proxy for a substitute.
NOMINEES FOR DIRECTORS
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Director
Name Age Since Principal Occupation
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Stanton M. Pikus 58 1981 President,Chief Executive Officer,
and Chairman of the Board of Directors
Kevin J. McAndrew 40 1990 Executive Vice President, Chief
Operating Officer, Chief Financial
Officer, Treasurer
Jean Zwerlein Pikus 45 1984 Vice President - Operations, Secretary
Alan B. Manin* 61 1981 President, Atlantis
Stephen M. Vineberg* 57 1988 President, CMQ, Inc.
Paul L. Shapiro* 47 1992 Manager, McKesson Drug Co.
Frank A. Cappiello* 72 1995 Mutual Fund Money Manager, Closed-
End Fund Advisors, Inc.
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*Independent Directors
BIOGRAPHIES OF THE NOMINEES FOR DIRECTORS
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STANTON M. PIKUS, President, Chief Executive Officer and Chairman
of the Board of Directors, was a founder of the Company (1981). He
graduated from The Wharton School of the University of Pennsylvania
(B.S., Economics and Accounting) in 1962. From 1968 until 1984 he
had been President and majority stockholder of Brown, Bailey and
Pikus, Inc., a mergers and acquisitions consulting firm that had
completed more than twenty transactions. In addition, Mr. Pikus
has been retained in the past by various small to medium-sized
public companies in the capacity of an independent financial
consultant. Since 1984, Mr. Pikus has devoted 100% of his time to
the Company.
KEVIN J. McANDREW, CPA, Chief Operating Officer since December,
1993; Executive Vice President and Chief Financial Officer of the
Company since June 21, 1987; Treasurer since January, 1988; and
Director since 1990. He is a graduate of the University of
Delaware (B.S. Accounting, 1980) and has been a Certified Public
Accountant since 1982. From 1980 to 1983, he was an Auditor with
the public accounting firm of Coopers & Lybrand in Philadelphia.
From 1984 to 1986, Mr. McAndrew was employed as a Controller for a
New Jersey based division of Allied Signal, Inc.
JEAN ZWERLEIN PIKUS, Vice President of Human Resources and
Operations, Secretary, and Director since December 1, 1984, was
employed by J. B. Lippincott Company, a publishing company, from
1974 to 1983, where she was Assistant Personnel Manager and also
created its word processing center, and was responsible for the
day-to-day control of word processing and graphic services. In
1984, Ms. Pikus graduated from The Wharton School of the University
of Pennsylvania (B.S., Accounting and Management, cum laude). Ms.
Pikus is the wife of the President, Stanton M. Pikus.
ALAN B. MANIN, Director of the Company since its inception, is a
graduate of Temple University (B.S., 1960; M.Ed., 1966); a former
teacher and Department Chairman in the Philadelphia School System
(1960-1966); a former Vice President and Director of Education for
Evelyn Wood Reading Dynamics (1966-1972); a former Director of
Northeast Preparatory School (1973); President, Chief Operating
Officer and founder of Health Careers Academy, a federally
accredited (National Association of Trade and Technical Schools)
vocational school (1974-1979); and a founder of the Company (1981).
He is currently the President of Atlantis, a company which provides
motivational training to employees of Fortune 1000 companies.
STEPHEN M. VINEBERG, a Director since 1988, is currently the
President and Chief Executive Officer of CMQ, Inc. Previously he
was a Vice President of Fidelity Bank, Philadelphia, where he was
Chief Operating Officer of the Data Processing, Systems and
Programming Divisions. Mr. Vineberg also directed a wholly-owned
subsidiary of the bank that developed and marketed computer
software, operated a service bureau and coordinated all electronic
funds transfer activities.
PAUL L. SHAPIRO, a Director since December, 1992, has worked for
McKesson Drug Company for the past 15 years. From 1973 through
1975, he was Director of the Pennsylvania Security Officers'
Training Academy. In 1973, he graduated from York College of
Pennsylvania with a B.S. Degree in Police Administration.
FRANK A. CAPPIELLO, a Director since April, 1995, is President of
an investment counseling firm: McCullough, Andrews & Cappiello,
Inc., providing management of more than $1 billion of assets. He is
Chairman of three no-load mutual funds; Founder and Principal of
Closed-End Fund Advisors, Inc.; publisher of Cappiello's Closed-End
Fund Digest; author of several books and a regular panelist on
"Wall Street Week with Louis Rukeyser." For more than 12 years Mr.
Cappiello was Chief Investment Officer for an insurance holding
company with overall responsibility for managing assets of $800
million. Prior to that, he was the Research Director of a major
stock brokerage firm. He is a graduate of the University of Notre
Dame and Harvard University's Graduate School of Business
Administration.
RELATED TRANSACTIONS
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Please be advised that the present Officers and Directors have the
following relationships and related transactions with the Company.
In early 1993, the Company agreed to purchase and restructure the
key-man life insurance policies for its Corporate Officers. The
amount and beneficiary of the key-man life insurance policies are
as follows:
Corporate Officers Amount of Policy Beneficiary
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Stanton M. Pikus $1,000,000 Company
Kevin J. McAndrew $1,000,000 Company
Jean Z. Pikus $ 500,000 Company
Frank A. Cappiello was granted 33,334* options on January 30, 1995
which are not part of the 1987 Employee Stock Option Plan. The
options convert to restricted common stock and Mr. Cappiello has
five years from the date of grant to exercise these options.
In January, 1997 Mr. Cappiello purchased 33,334* shares of
Canterbury Information Technology, Inc. restricted common stock at
$1.41* per share. Mr. Cappiello also received 33,334* five year
stock options exercisable at $2.25* per share for his services, as
well as his membership on the Board for the next two years.
*Theses numbers reflect the 1 for 3 reverse stock split effective
April 14, 1998.
EXECUTIVE CASH COMPENSATION
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The following table sets forth a summary of cash compensation paid
by the Company with respect to services rendered in fiscal 1995,
1996 and 1997 to the Executive Officers of the Company who received
at least $100,000 in total annual compensation.
Summary Compensation Table
--------------------------
Name & Securities All
Principal Position Year Salary($) Bonus($) Other Annual Restricted Underlying LTIP Other Compen-
Compensation($) Stock Awards($) Options/SAR(#)* Payouts(S) sation($)
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Stanton Pikus 1997 $195,000 $ - $ - $ - 33,334 $ - $ -
President, 1996 195,000 - - - 16,667 - -
1995 199,148 - - - 0 - 26,120
Kevin McAndrew 1997 $120,000 - - - 25,001 - -
Chief Operating 1996 120,000 - - - 16,667 - -
Officer, 1995 127,111 - - - 0 - 11,307
(1) No other Executive Officers received in excess of $100,000 in
total annual compensation for the three year period.
*Theses numbers reflect the 1 for 3 reverse stock split effective
April 14, 1998.
OPTION GRANTS
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The following Executive Officers were granted five year stock
options during fiscal 1997 pursuant to the 1995 Stock Incentive
Plan.
Stock Option Stock Option Percentage of
Name Amount* Price* Total Options Granted
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Jean Z. Pikus 8,334 $2.250
6,667 $3.561 7.81%
Kevin J. McAndrew 16,667 $2.250
8,334 $3.561 13.01%
Stanton M. Pikus 33,334 $2.250 17.35%
*Theses numbers reflect the 1 for 3 reverse stock split effective
April 14, 1998.
AGGREGATED OPTION EXERCISES IN 1997 AND FISCAL YEAR-END 1997 OPTION VALUES
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The following table provides information on option exercises in
fiscal 1997 by the Executive Officers and on the Executive
Officers' unexercised options at November 30, 1997. Included are
options granted under the 1987 Employee Stock Option Plan and the
1995 Stock Incentive Plan.
Shares acquired Number of Securities Underlying Value of Unexercised In-The-Money
on Value Unexercised Options at Year-End 1997(#) Options at Year-End 1997(#)
Name Exercise Realized($) Exercisable Unexercisable Exercisable Unexercisable
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Stanton M. Pikus 0 - 66,668* 0 $28,101 0
Kevin J. McAndrew 0 - 91,669* 0 $14,051 0
Jean Z. Pikus 0 - 33,335* 0 $ 7,026 0
*Theses numbers reflect the 1 for 3 reverse stock split effective
April 14, 1998.
Option holders have five years from the date of grant to exercise
any or all of their options, and upon leaving the Company the
option holders must exercise within 30 days or lose the options.
These options exercise into restricted shares of Company stock.
EMPLOYMENT CONTRACTS
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During fiscal 1997, the Company entered into an amended employment
agreement with the President. The term of the agreement is five
years and calls for a base salary of $195,000 which began on
December 1, 1995 with annual salary increases of $25,000 in the
second and third years and to remain at $245,000 for the last two
years of the contract. Also included in the agreement are future
incentives based on Company performance. There is a bonus
opportunity of 5% on the first $500,000 of consolidated income
before taxes and bonus and 3% above $500,000. In conjunction with
this contract, the President agreed to a covenant not to compete
with the Company during his employment and for a period of one year
after his employment with the Company has terminated. For the year
ended November 30, 1996 the President waived his right to receive
any performance bonus earned and in exchange his contract was
extended for one year through 2001 at the same terms.
The Company also has an amended employment agreement with its
Executive Vice President and Chief Operating Officer. The term of
the agreement is five years and calls for a base salary of $120,000
for fiscal 1997 and increases of $15,000 per year for the next four
years. Also included in the agreement are future incentives based
on the Company's profitability. A bonus of $30,000 will be earned
if the consolidated income before income taxes and bonus of the
Company exceeds $1,000,000. The bonus opportunity applies to each
of the five years of the contract. For the year ended November 30,
1996, the Executive Vice President waived his right to receive any
performance bonus earned and in exchange the contract was extended
to 2001 at the same terms.
COMMITTEES OF THE BOARD
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The Board has established an Audit Committee, a Stock Option
Committee and a Compensation Committee. All three committees are
currently composed entirely of Independent Directors who are not
Officers of the Company (Frank A. Cappiello, Paul Shapiro and
Stephen Vineberg).
DIRECTORS' REMUNERATION
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Directors receive no cash compensation for services as Directors.
The following Directors received five-year stock options at market
value during the fiscal year.
Name Stock Option Amount* Stock Option Price*
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Frank A. Cappiello 33,334 $2.250
Alan Manin 3,334 $2.250
Paul Shapiro 8,334 $2.250
2,500 $3.561
Stephen Vineberg 8,334 $2.250
2,500 $3.561
*Theses numbers reflect the 1 for 3 reverse stock split effective
April 14, 1998.
The Company had 28 meetings of the Board of Directors during the
last full fiscal year. There was no incumbent who, during the last
full fiscal year, attended fewer than 86% of said meetings.
PERFORMANCE GRAPH
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The following graph demonstrates a comparison of the Company's
shareholder returns at each fiscal year end as of November 30 with
shareholder returns on a broad market index, the Nasdaq Stock
Market (US), and an industry index, Nasdaq Non-Financial Stocks.
The comparison assumes $100.00 was invested on November 30, 1993
in the Company's common stock, the Nasdaq Stock Market (US) and the
Nasdaq Non-Financial Stocks.
COMPARISON OF CUMULATIVE TOTAL RETURN
KEY: --*-- Nasdaq National Market (US)
==*== Nasdaq Non-Financial
--#-- Canterbury
D 550 - --*--
==*==
O 500 -
L 450 - -=*=-
-=*=-
L 400 - -=*=-
A 350 - -=*=-
R 300 - -=*=-
S 250 - -=*=-
200 -
-=*=-
150 -
100 - -=*#=-
--#-- --#--
50 - --#----#-- --#----#----#--
--#----#----#--
0 -
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Years
1993 1994 1995 1996 1996 1997
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ENTIRE
SLATE OF NOMINEES IN PROPOSAL NO. 1.
A majority vote of over 50% will be necessary to carry this
proposal.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
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Name Shares Beneficially Owned % Owned of
on April 17, 1997* Company's Shares
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Stanton M. Pikus 558,248(2) 9.08%
Kevin J. McAndrew 186,306(3) 3.03%
Jean Zwerlein Pikus (1) 89,808(4) 1.46%
Alan B. Manin 134,057(5) 2.18%
Stephen M. Vineberg 41,965(6) .68%
Paul L. Shapiro 34,003(7) .55%
Frank A. Cappiello 151,669(8) 2.47%
Ronald Stella 3,334(9) .05%
Kevin Tull 4,167 .07%
Alan McGaffin 99,412 1.62%
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TOTAL 1,302,969 21.20%
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(1) Wife of Stanton M. Pikus, deemed to have beneficial interest
in the 558, 248(2)*owned by husband.
(2) Included are 16,667* stock options exercisable at $10.875* per
share; 16,667* stock options exercisable at $3.093* per share;
33,334* stock options exercisable at $2.25* per share; and 50,000
stock options exercisable at $1.375.
(3) Included are 33,334* stock options exercisable at $8.25* per
share; 16,667* stock options exercisable at $10.875*; 8,334* stock
options exercisable at $3.561* per share; 16,667* stock options
exercisable at $3.093* per share; 16,667* stock options exercisable
at $2.25* per share; and 35,000 stock options exercisable at $1.375.
(4) Included are 10,000* stock options exercisable at $10.875* per
share; 6,667* stock options exercisable at $3.561* per share;
8,334* stock options exercisable at $3.093* per share; 8,334* stock
options exercisable at $2.25* per share; and 20,000 stock options
exercisable at $1.375 per share.
(5) Included are 3,334* stock options exercisable at $10.875* per
share; 3,334* stock options exercisable at $3.093* per share;
3,334* stock options exercisable at $2.25* per share; and 10,000
stock options exercisable at $1.375 per share.
(6) Included are 2,500* stock options exercisable at $8.25* per
share; 2,500* stock options exercisable at $9.375* per share;
2,500* stock options exercisable at $3.561* per share; 3,334* stock
options exercisable at $8.43* per share; 834* stock options
exercisable at $8.25* per share; 3,334* stock options exercisable
at $3.093* per share; 8,334* stock options exercisable at $2.25*
per share; and 10,000 stock options exercisable at $1.375 per share.
(7) Included are 2,500* stock options exercisable at $8.25* per
share; 2,500* stock options exercisable at $9.375* per share; 834*
stock options exercisable at $8.25* per share; 2,500* stock options
exercisable at $3.561* per share; 3,334* stock options exercisable
at $8.43* per share; 3,334* stock options exercisable at $3.093*
per share; 8,334* stock options exercisable at $2.25* per share;
and 10,000 stock options exercisable at $1.375 per share.
(8) Included are 33,334* stock options exercisable at $6.00* per
share; 3,334* stock options exercisable at $3.093* per share;
33,334* stock options exercisable at $2.25* per share; and 20,000
stock options exercisable at $1.375 per share. (See related transactions)
(9) Included are 3,334* stock options exercisable at $3.00* per share.
* Theses numbers reflect the 1 for 3 reverse stock split
effective April 14, 1998.
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's Executive Officers, Directors, and Affiliates to file
initial reports of ownership and reports of changes of ownership
of the Company's common stock with the Securities and Exchange
Commission. These Executive Officers, Directors, and Affiliates
are required to furnish the Company with copies of all Section
16(a) forms that they file. Based solely on the Company's review
of Securities and Exchange Commission Forms 3, 4, and 5 submitted
to the Company, and written representations from these Officers,
Directors, and Affiliates that no other reports were required, the
Company notes that all forms were filed in a timely fashion.
Proposal No. 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
- -------------- ------------------------------------------------------
The Board of Directors, upon recommendation of the Audit Committee,
has selected Ernst & Young, LLP, as independent accountants for
Canterbury Information Technology, Inc. for the fiscal year ending
November 30, 1998. Ernst & Young, LLP has been the independent
public accountants for Canterbury since 1984.
Representatives of Ernst & Young, LLP are expected to be present
at the Meeting and will have an opportunity to make a statement if
they desire to do so and will be available to respond to
appropriate questions. If the appointment of Ernst & Young, LLP
is not ratified, the Board of Directors will reconsider its
selection of auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL
NO. 2.
A majority vote of over 50% will be necessary to carry this
proposal.
EXPENSES OF SOLICITATION
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The cost of the solicitation of proxies will be borne by the
Company. In addition to the use of the mails, proxies may be
solicited by regular employees of the Company, either personally
or by telephone or telegraph. The Company does not expect to pay
any compensation for the solicitation of proxies, but may reimburse
brokers and other persons holding shares in their names or in the
names of nominees for expenses in sending proxy materials to
beneficial owners and obtaining proxies from such owners.
OTHER MATTERS
- -------------
A copy of the Company's annual report to stockholders for the year
ended November 30, 1997 is enclosed herein.
This proxy contains forward looking statements. The actual results
might differ materially from those projected in the forward looking
statements. Additional information concerning factors that could
cause actual results to materially differ from those in forward
looking statements is contained in Canterbury Information Technology,
Inc.'s SEC filings, including periodic reports under the Securities
Exchange Act of 1934, as amended, copies of which are available upon
request from the Canterbury investor relations department.
The Board of Directors does not intend to bring any matters before
the meeting other than as stated in this proxy statement, and is not
aware that any other matters will be presented for action at the
meeting. If any other matters come before the meeting, the persons
named in the enclosed form of proxy will vote the proxy with respect
thereto in accordance with their best judgment, pursuant to the
discretionary authority granted by the proxy. The cost of preparing,
assembling and mailing the proxy material will be borne by the
Company.
All properly executed proxies delivered pursuant to this solicitation
and not revoked will be voted at the Meeting in accordance with the
directions given. In voting by proxy in regard to the election of
seven Directors to serve until the 1998 Annual Meeting of
Stockholders, stockholders may vote in favor of all nominees or
withhold their votes as to all nominees or withhold their votes as to
specific nominees. With respect to other items to be voted upon,
stockholders may vote in favor of the item or against the item or may
abstain from voting. Stockholders should specify their choices on
the enclosed proxy. If no specific instructions are given with
respect to the matters to be acted upon, the shares represented by
the proxy will be voted FOR the election of all Directors and FOR the
proposal to ratify and approval of the appointment of independent
accountants.
Respectfully submitted,
By: /s/ Jean Zwerlein Pikus
Jean Zwerlein Pikus
Vice President and Secretary
Dated: July 28, 1998
Stockholders who do not expect to be present at the meeting and who
wish to have their shares voted, are requested to make, date and sign
the enclosed proxy and return it in the enclosed envelope. No
postage is required if it is mailed in the United States.